Pascrell Demands New Answers on IRS Enforcement Against Law-Breaking Groups

Tax-exempt organizations allegedly participated in January 6 Capitol insurrection

WASHINGTON, DC – U.S. Rep. Bill Pascrell, Jr. (D-NJ-09), the Chair of the House Ways and Means Subcommittee on Oversight, has written the U.S. Treasury Inspector General for Tax Administration (TIGTA) demanding fresh answers on the Internal Revenue Service’s (IRS) enforcement against tax-exempt organizations engaging in illegal activities.

“As you know, the IRS has long held that organizations engaged in the planning and sponsoring, as well as the actual conduct of illegal activities do not qualify for tax exemption. However, the scope of IRS efforts to enforce its long-held position remains unclear,” writes Chair Pascrell. “I ask that TIGTA examine the IRS’s enforcement program for exempt organizations that participate in illegal activities, such as the violent and deadly attack on the United States Capitol.”

The letter follows up on a January 13, 2021 inquiry by Ways and Means Committee members demanding action from the U.S. Treasury Department on any federally tax-exempt groups that participated in the January 6 riot at the U.S. Capitol.

As Chair, Pascrell has made oversight and reform of the IRS a top priority. Pascrell has raised alarms on the slow start to the 2021 tax-filing season, and with Chairman Richard Neal (D-MA-01) has castigated the IRS’s continually sending out erroneous notices to taxpayers. On February 18, Pascrell held a hearing on free tax preparation services available to in-need Americans during the pandemic.

The text of Chair Pascrell’s latest letter to TIGTA is provided below.

March 3, 2021

The Honorable J. Russell George

Inspector General

Treasury Inspector General for Tax Administration

U.S. Department of the Treasury

1401 H Street, NW, Suite 469

Washington, DC 20005

Dear Inspector General George,

I write today to request that the Treasury Inspector General for Tax Administration (TIGTA) review the extent to which the Internal Revenue Service’s (IRS) enforcement programs are ensuring that tax-exempt organizations are not participating in illegal activities that seek to interfere with the conduct of our government.

The attack on the United States Capitol on January 6, 2021, still leaves a stain on our great democracy. In response to media reports suggesting that some tax-exempt organizations helped organize and promote this violent insurrection, Democrats on the Committee on Ways and Means (Committee) wrote to the Department of the Treasury (Treasury) shortly after the attack.^[1] The members of the Committee asked for guidance to be issued for tax-exempt organizations on the current laws, rules, and sanctions governing their involvement in illegal activities that interfere with the conduct of our government. The members of the Committee also asked Treasury to consider whether any actions against, or investigations of, specific organizations may be appropriate.

As you know, the IRS has long held that organizations engaged in the planning and sponsoring, as well as the actual conduct, of illegal activities do not qualify for tax exemption. However, the scope of IRS efforts to enforce its long-held position remains unclear. In fact, in the report you recently issued, you found that the IRS enforcement program for ensuring tax law compliance by tax-exempt organizations can be improved.

I ask that TIGTA examine the IRS’s enforcement program for exempt organizations that participate in illegal activities, such as the violent and deadly attack on the United States Capitol. I would also like a briefing from TIGTA following its review. Further, due to the ongoing interest in this matter, I request that TIGTA provide me with an update on the review no later than March 17, 2021. Thank you, in advance, for your prompt attention to this urgent matter.

Sincerely,

Bill Pascrell, Jr.

Member of Congress

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[1]  Ways and Means Democrats Call on Treasury to Update Guidance Warning Tax-Exempt Organizations About Engaging in Insurrection Activities (Jan. 13, 2021), https://waysandmeans.house.gov/media-center/press-releases/ways-and-means-democrats-call-treasury-update-guidance-warning-tax.